Question 1

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is
A)​$4800.
B)​$2400.
C)​$600.
D)​$6000.

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Question 2

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S.
A)​increases by the area G.
B)​decreases by the area E + F.
C)​decreases by the area B + E.
D)​increases by the area B + E + G

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Question 3

The principle of comparative advantage asserts that
A)not all countries can benefit from trade with other countries.
B)the world price of a good will prevail in all countries, regardless of whether those countries allow international trade in that good.
C)countries can become better off by exporting goods, but they cannot become better off by importing goods.
D)countries can become better off by specializing in what they do best.

Accepted Answer

The principle of comparative advantage suggests that countries can improve their economic well-being by specializing in the production of goods and services in which they have a comparative advantage (i.e., where their opportunity cost of production is lower than that of other countries). This allows them to produce more efficiently and at a lower cost, which in turn can lead to increased exports and greater economic growth. Therefore, option D is the correct answer.

Question 4

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to Figure 9-26.​ The figure shows that
A)​there will be a surplus of baseballs if the U.S. opens the market for baseballs to international trade.
B)​there will be a shortage of baseballs after the U.S. market for baseballs opens up to international trade.
C)​the U.S. has a comparative advantage in the production of baseballs.
D)​other countries have an absolute advantage in the production of baseballs.

Accepted Answer

The figure shows that at the domestic equilibrium quantity and price, the U.S. has lower production costs (shown by the lower supply curve) compared to the world price. This indicates that the U.S. has a comparative advantage in the production of baseballs. Therefore, opening up the market to international trade would result in a shift from domestic production to international production, but the U.S. would still be able to produce and export baseballs at a lower cost than other countries.

Question 5

A tariff is a
A)limit on how much of a good can be exported.
B)limit on how much of a good can be imported.
C)tax on an exported good.
D)tax on an imported good.

Accepted Answer

A tariff is a tax on imported goods, designed to make them more expensive and less competitive with domestically produced goods. This is often done to protect domestic industries or to increase revenue for the government. It is not directly related to export limits.

Question 6

​When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that
A)​the domestic price will fall after trade opens up.
B)​both buyers and sellers in that country will be better off as a consequence of opening up the market to international trade.
C)​the total surplus for this good will increase as a result of opening up the market to international trade.
D)​opening the market to international trade will create a deadweight loss.

Accepted Answer

The answer of ​When a country opens up to trade...

Question 7

Patterns of trade among nations are primarily determined by
A)cultural considerations.
B)political considerations.
C)comparative advantage.
D)differences in the income elasticity of demand among nations.

Accepted Answer

Patterns of trade among nations are primarily determined by the concept of comparative advantage. This theory suggests that countries should specialize in producing goods and services in which they are relatively most efficient, and then trade with other countries for goods and services that they are relatively less efficient in producing. This allows for greater efficiency and increases overall global output. Cultural considerations, political considerations, and income elasticity of demand can all have an impact on trade patterns, but comparative advantage is the most fundamental driver of trade.

Question 8

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​
A)​import 600 baseballs.
B)​export 300 baseballs.
C)​import 400 baseballs.
D)​export 600 baseballs.

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Question 9

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if
A)consumer surplus equals producer surplus in the Canadian soybean market.
B)total surplus exceeds consumer surplus in the Canadian soybean market.
C)Canada permits international trade in soybeans.
D)Canada forbids international trade in soybeans.

Accepted Answer

If Canada forbids international trade in soybeans, then the market for soybeans will consist solely of domestic buyers and sellers. Without access to international markets, there will be no competition from foreign producers and no opportunity for Canadian producers to sell their soybeans abroad. Therefore, the market will be contained within Canada, resulting in a purely domestic market for soybeans.

Question 10

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is​
A)​$16
B)$12​
C)$10
D)​$8

Accepted Answer

The equilibrium price in a market is where the supply and demand curves intersect. In this figure, before opening the US baseball market to trade, the supply and demand curves intersect at a price of $10. So, the correct answer is C) $10.

Question 11

​Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,
A)​Mexico as a whole is better off, since the tariff increases employment and production in the domestic chocolate industry.
B)​Mexico as a whole is better off, since the tariff results in tax revenue for the Mexican government.
C)​Mexico as a whole is worse off, since producer surplus and consumer surplus both decrease.
D)​Mexico as a whole is worse off, since the increase in producer surplus is smaller than the drop in consumer surplus plus tariff revenues.

Accepted Answer

The imposition of the tariff will increase producer surplus, but it will also decrease consumer surplus due to higher prices for imported chocolate. Additionally, the tariff revenue may not be sufficient to make up for the decrease in consumer surplus, resulting in a net loss for Mexico. Therefore, Mexico as a whole is worse off, and choice D is correct.

Question 12

A tax on an imported good is called a
A)quota.
B)tariff.
C)supply tax.
D)trade tax.

Accepted Answer

A tax on an imported good is called a tariff. A quota is a restriction on the quantity of a good that can be imported. A supply tax and trade tax are not commonly used terms in economics.

Question 13

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that
A)if Canada were to allow trade, it would export hockey sticks.
B)Canada has an absolute advantage, relative to other countries, in producing hockey sticks.
C)Canada has a comparative advantage, relative to other countries, in producing baseball bats.
D)All of the above are correct.

Accepted Answer

The answer of Suppose the nation of Canada forbids international...

Question 14

What is the fundamental basis for trade among nations?
A)shortages or surpluses in nations that do not trade
B)misguided economic policies
C)absolute advantage
D)comparative advantage

Accepted Answer

The fundamental basis for trade among nations is comparative advantage. This means that countries specialize in producing the goods and services that they can do more efficiently than other countries and trade with each other. By doing so, they can increase their overall output and benefit from the global exchange of goods and services. This leads to greater efficiency, productivity, and greater availability of goods and services at lower prices for consumers.

Question 15

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-​Refer to figure 9-26. The figure shows that
A)​the U.S. will import baseballs when the market opens to international trade.
B)​the U.S. will export baseballs when the market opens to international trade.
C)​the U.S. will be a net loser when the market for baseballs opens to international trade.
D)​if the U.S. opens its baseball market to international trade, the price will plummet.

Accepted Answer

The figure shows that with the opening of the market to international trade, the world price of baseballs is lower than the domestic price in the U.S. (as shown by the horizontal line below the domestic price). This creates an incentive for domestic producers to export baseballs (supply more to the world market) and for domestic consumers to import baseballs (demand more from the world market). As a result, the U.S. becomes a net exporter of baseballs. The U.S. gains from trade in this case, as it can export at a higher price than the world price and import at a lower price than the domestic price.

Question 16

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to figure 9-26. After opening the U.S. baseball market to international trade, total surplus is
A)​$4800.
B)​$5400.
C)​$6000.
D)​$1200

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Question 17

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to figure 9-26. After the opening of the U.S. baseball market to international trade, it's possible to conclude that
A)​both U.S. buyers and U.S. sellers are worse off.
B)​both U.S. buyers and U.S. sellers are better off.
C)​U.S. buyers are better off but U.S. sellers are worse off.
D)​U.S. buyers are worse off but U.S. sellers are better off.

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Question 18

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that
A)Wheatland has a comparative advantage, relative to other countries, in producing corn.
B)other countries have a comparative advantage, relative to Wheatland, in producing fish.
C)the price of fish in Wheatland exceeds the world price of fish.
D)if Wheatland were to allow trade, it would import corn.

Accepted Answer

Wheatland would import corn because it costs more in terms of fish compared to other countries, indicating other countries can produce corn more efficiently.

Question 19

​Suppose that the U.S. has a comparative advantage in the production of spreadsheet software. As a result of opening up the market to international trade,
A)​U.S. citizens benefit from lower software prices, increasing consumer surplus in the market.
B)​U.S. software producers are harmed, since the price that these producers receive will decline as the price falls to the world price.
C)​total surplus in this market will remain unchanged, as the decline in benefits received by software producers exactly balances the increase in benefits received by US software consumers.
D)​U.S. producers benefit from higher software prices, increasing producer surplus in the market.

Accepted Answer

The answer of ​Suppose that the U.S. has a comparative...

Question 20

​Figure 9-26
The diagram below illustrates the market for baseballs in the U.S. 
-Refer to figure 9-26. Consumer surplus in the U.S. prior to the opening of the baseball market to international trade is the area
A)​A
B)​A + B + C
C)​A + B + E
D)​C + F

Accepted Answer

The answer of ​Figure 9-26
The diagram below illustrates the market...

Quiz 9: Application: International Trade

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S.

The principle of comparative advantage asserts that

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. The figure shows that

A tariff is a

When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that

Patterns of trade among nations are primarily determined by

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is

Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

A tax on an imported good is called a

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

What is the fundamental basis for trade among nations?

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. The figure shows that

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After opening the U.S. baseball market to international trade, total surplus is

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the U.S. baseball market to international trade, it's possible to conclude that

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

Suppose that the U.S. has a comparative advantage in the production of spreadsheet software. As a result of opening up the market to international trade,

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Consumer surplus in the U.S. prior to the opening of the baseball market to international trade is the area

Quiz 9: Application: International Trade

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -​Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S.

The principle of comparative advantage asserts that

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26.​ The figure shows that

A tariff is a

​When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that

Patterns of trade among nations are primarily determined by

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will​

The market for soybeans in Canada consists solely of domestic buyers of soybeans and domestic sellers of soybeans if

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is​

​Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

A tax on an imported good is called a

Suppose the nation of Canada forbids international trade. In Canada, you can obtain a hockey stick by trading 5 baseball bats. In other countries, you can obtain a hockey stick by trading 8 baseball bats. These facts indicate that

What is the fundamental basis for trade among nations?

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -​Refer to figure 9-26. The figure shows that

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After opening the U.S. baseball market to international trade, total surplus is

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the U.S. baseball market to international trade, it's possible to conclude that

The nation of Wheatland forbids international trade. In Wheatland, you can buy 1 pound of corn for 3 pounds of fish. In other countries, you can buy 1 pound of corn for 2 pounds of fish. These facts indicate that

​Suppose that the U.S. has a comparative advantage in the production of spreadsheet software. As a result of opening up the market to international trade,

​Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Consumer surplus in the U.S. prior to the opening of the baseball market to international trade is the area

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening of the U.S. baseball market to international trade, total surplus is

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the baseball market to international trade, producer surplus in the U.S.

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. The figure shows that

When a country opens up to trade in a good for which it has a comparative advantage, and the country begins to export the good, we can conclude that

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to Figure 9-26. As a result of opening up the baseball market to international trade, the U.S. will

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Prior to opening the U.S. baseball market to trade, the equilibrium price of a baseball is

Mexico has imposed a tariff on the importation of chocolate. As a consequence of the tariff,

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. The figure shows that

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After opening the U.S. baseball market to international trade, total surplus is

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. After the opening of the U.S. baseball market to international trade, it's possible to conclude that

Suppose that the U.S. has a comparative advantage in the production of spreadsheet software. As a result of opening up the market to international trade,

Figure 9-26 The diagram below illustrates the market for baseballs in the U.S. -Refer to figure 9-26. Consumer surplus in the U.S. prior to the opening of the baseball market to international trade is the area